Light olefins
Overview
The global light olefins market is made up of ethylene and propylene monomers. These product markets can be affected by a great many factors.
Ethylene is the most widely used commodity chemical and is produced globally in all major regions. It is converted into many products used in daily life like plastic packaging, durable goods, hygiene products and other consumer items. The ethylene market is driven primarily by regions of low production cost and regions of high demand growth. Polyethylene, ethylene’s largest derivative, represents about 65pc of global ethylene demand. Anyone involved in the ethylene industry – directly or indirectly – needs market and pricing insight to anticipate supply shortages and potential swings in pricing.
Propylene is the second most widely used commodity chemical and is produced globally in all major regions. Propylene is a volatile commodity because of its predominantly co-product nature and unpredictable supply, but recently the industry has been trending to more on-purpose production. It is converted into many products used in daily life like plastic packaging, durable goods, automotive products, and woven fabrics. Polypropylene, propylene ’s largest derivative, represents about 70pc of global propylene demand. Anyone involved in the propylene industry – directly or indirectly – needs market and pricing insight to anticipate supply shortages and potential swings in pricing.
Our light olefins experts will help you determine what trends to track and how to stay competitive in today’s ever-changing global market.
Latest light olefins news
Browse the latest market moving news on the global light olefins industry.
Viewpoint: Brazil tightens grip on polymer imports
Viewpoint: Brazil tightens grip on polymer imports
Sao Paulo, 29 December (Argus) — Brazil's growing dependence on polymer imports and its record trade deficit in 2025 have placed domestic producers and policymakers under mounting pressure, prompting a wave of protective measures, a trend expected to continue into 2026. Conditions for Brazilian polyethylene (PE) producers remained as challenging in 2025 as in 2024. PE imports totaled $1.49bn in January-November, only 1.5pc lower than the $1.51bn in the same period of 2024, while volumes rose slightly to 1.34mn metric tonnes (t) from 1.32mn t, according to Comexstat data.The marginal improvement in value reflects global price decreases rather than any structural shift in sourcing, underscoring persistent pressure on domestic producers. The backdrop to these difficulties was 2024, when Brazil posted its largest-ever annual polymer trade deficit. Imports of PE, polypropylene (PP) and polyvinyl chloride (PVC) surged as global supply expanded and domestic capacity remained constrained. Even after Brazil raised overall polymer import tariffs to 20pc from 12.6pc in October 2024, inflows continued to climb. These developments triggered the protective measures in 2025 that are likely to intensify in 2026. Braskem, Brazil's leading producer, reported a further $51mn in losses in the first nine months of 2025, fueling calls for government intervention. In response, Brazil imposed provisional anti-dumping duties on US and Canadian PE in August 2025 — $199.04/t for US-origin and $238.49/t for Canadian-origin resin — valid for six months. These measures were introduced by foreign trade council Gecex/Camex and are now under review by the department of trade defense Decom, with a final decision expected in early February. So far, these measures have had limited impact because preliminary duties can be suspended or refunded if overturned. Final duties, also expected in February, would lock in higher costs permanently, reducing pricing uncertainty and forcing buyers to seek alternative supply sources. Market participants are monitoring whether permanent tariffs will alter procurement strategies, particularly for large converters. Despite the new anti-dumping duties, the US remained Brazil's top PE supplier in January–November 2025, accounting for 66pc of volumes, down from 71pc one year earlier. Argentina expanded its share to 14.8pc from 10.9pc, with shipments rising to 199,415t. Canada maintained a smaller share, while other suppliers such as Colombia and Mexico continued to serve niche segments. Beyond PE, Brazil raised anti-dumping tariffs on US suspension-grade PVC to 43.7pc in May 2025, up from 8.2pc previously. This move effectively displaced US suppliers, opening space for Colombian and Argentine producers to increase their presence in the Brazilian PVC market. PP imports also remained elevated through 2025, with volumes stable from 2024 despite tariff adjustments. Domestic PP production continued to operate below capacity, reinforcing Brazil's reliance on imports for key downstream sectors such as packaging and automotive components. Looking ahead, Brazil's trade defense momentum is set to intensify through 2026. Participants expect the government to maintain a protectionist stance to restore competitiveness and narrow the polymer trade deficit. Additional investigations into other polymer grades and potential safeguard measures are under discussion. For downstream users, the evolving tariff landscape will require adjustments in sourcing strategies and cost management as Brazil seeks to rebalance its polymer markets. By Fred Fernandes and Isabela Mendes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Japan’s petchem firms finalise polymer integration plan
Japan’s petchem firms finalise polymer integration plan
Tokyo, 24 December (Argus) — Japanese petrochemical producers Sumitomo Chemical and Prime Polymer have finalised their contract to integrate Sumitomo's polyolefin production businesses with Prime Polymer, aiming to enhance the competitiveness of their polyolefin businesses. Prime Polymer — a joint venture between petrochemical firm Mitsui Chemicals and refiner Idemitsu — will merge Sumitomo's domestic polypropylene (PP) and linear low-density polyethylene (LLDPE) businesses on 1 July 2026, the companies said on 24 December. Sumitomo's PP and LLDPE production-related assets will be integrated into Prime Polymer later on 1 April 2027, as the system integration will take some time after the business merger, the companies said. After the integration, Prime Polymer will have a production capacity of 1.59mn t/yr for PP and 720,000 t/yr for PE in Japan. Mitsui will hold a 52pc share in Prime Polymer and Idemitsu will have 28pc, with Sumitomo newly acquiring 20pc in exchange for the integration of its polyolefin businesses into Prime Polymer. Currently Mitsui and Idemitsu hold a 65pc and 35pc share in Prime Polymer respectively. Prime Polymer has a production capacity of 1.26mn t/yr for PP and 550,000 t/yr for PE in Japan currently. Demand for domestically produced polyolefins will continue to decline because of shrinking domestic demand, population decline and changing lifestyles, the companies said. The companies aim to optimise their polyolefin businesses and achieve annual cost savings of over ¥8bn/yr ($51mn/yr) through this business integration. Idemitsu, Mitsui and Sumitomo first announced this integration plan in September. By Kohei Yamamoto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Viewpoint: New PE capacity favorable to buyers in 2026
Viewpoint: New PE capacity favorable to buyers in 2026
Houston, 23 December (Argus) — With 2mn t/yr of new US polyethylene (PE) capacity set to start up in the second half of 2026, pricing power may stay in domestic buyers' hands for much of the year, particularly if producers struggle to find homes for the new resin. Golden Triangle Polymers, a joint venture between Chevron Phillips Chemical and QatarEnergy, is expected to start up 2mn t/yr of high density polyethylene (HDPE) capacity in Orange, Texas, by the middle of next year, aimed almost entirely at the export market. While the US remains a low-cost producer, the new volume will have to compete with growing global supply, including around 4mn t/yr of new PE capacity projected to start up in Asia in 2026. With the key China market becoming more self-sufficient, it may be difficult for the global market to absorb the new capacity. There are some potential bright spots for US producers in the global market, including the potential for a free-trade agreement with the EU, which would further open up EU countries for more US volume. But if enough new export destinations are not found, market participants have said material will back up in the US/Canada domestic market, keeping supplies loose, and making it difficult for producers to raise domestic contract prices. As new PE capacity has been added in the US, the percentage of sales going to exports has continued to rise. In 2022 — prior to the start-up of more than 3.3mn t/yr of new capacity from Shell, Baystar, Nova and Dow that took place from 2023 through 2025 — total exports averaged 39pc of total sales, according to data from the American Chemistry Council (ACC). In 2025, year-to-date through November, exports averaged 48pc of total sales. New capacity is one factor that can cause export prices to decline, as supplies increase in the market. As an example, Dow started up its new 600,000 t/yr HDPE/LLDPE swing unit in Freeport, Texas, in June 2025, with the full ramp-up beginning in July. From July through 12 December, US LLDPE butene export prices declined by around 18pc. Over the same period, US/Canada contract prices held steady every month from July through November, with expectations that December contracts also may settle flat as three US producers have not announced an increase for the month. There were a variety of reasons for the flat contract pricing in the second half of 2025, including weak domestic demand. But one main factor was plentiful supply, and low export prices, as US/Canada producers fought for market share in the global market. "[The US] is so over-supplied," said one US PE buyer. "The economic factors are in the buyers' favor right now." For January, most US/Canada producers have announced price increases of between 5-7¢/lb. Suppliers are expected to push hard for a price increase in January, with many market participants expecting some level of a price increase to stick in the first quarter. But with little expectation for improved demand in 2026, buyers, distributors and traders said they expect the market to remain well-supplied, which will make it difficult for further contract increases. "I think we will continue in a buyers' market for a couple more years," said one US trader. Producers are wary about global oversupply, but believe there will be some additional capacity rationalization in other regions that will help create more export opportunities. Geopolitical events such as the Ukraine-Russia conflict, Venezuela embargoes, trade tariffs, and anti-dumping duties have contributed as well to a volatile market for finished goods that could also limit demand growth next year. Low ethane/ethylene prices also contribute to lower PE prices but this downward trend is expected to change as US olefins exports increase in 2026, resulting in a more balanced supply/demand market. By Michelle Klump Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Viewpoint: BZ demand to see little change in 2026
Viewpoint: BZ demand to see little change in 2026
Houston, 22 December (Argus) — US benzene (BZ) demand is expected to remain steady in the first quarter of 2026 because of low operating rates for BZ derivatives, sources said. Operating rates for BZ derivatives were low in 2025 because of weak demand and a busy turnaround season, with several styrene monomer (SM), cumene and phenol producers conducting turnarounds. At least one US Gulf coast styrene producer is expected to perform a turnaround in the first quarter that is estimated to run 20-30 days, another source said. Ethylbenzene (EB) demand into gasoline blending may finally see its seasonal lull, as high-octane, low-Reid vapor pressure (RVP) blendstocks are typically in low demand from October-March, when US gasoline specifications allow high-RVP blendstocks like butane to enter the blend pool. In late 2025, EB demand remained steady into gasoline blending because of strong demand for high-octane aromatic blendstocks to offset low-octane light naphtha, which was blended into the gasoline pool to keep up with the demand for US gasoline exports. But, with expensive feedstock BZ heading into 2026, EBSM producers cannot sell EB above breakeven levels, which caused EBSM producers to reduce operating rates, sources said. When spot BZ reaches a premium to feedstock reformate prices, EB becomes a less competitive blendstock because of its production cost ( see chart ). This disposition of ethylbenzene's value as a blendstock opens competition for other aromatic blendstocks like toluene and mixed xylenes to enter the gasoline pool. North American EBSM operating rates are expected to remain at 48-60pc in early 2026, according to a generic Argus model with operating rates informed by market participants. SM export demand is anticipated to remain limited. The arbitrage to Europe is closed for December-loading cargoes to arrive in January, Argus data show. Buying interest could emerge from Latin America, which typically takes 20,000-25,000 metric tonnes (t) of SM from North America every two or three months, depending on polystyrene (PS) production rates. Cumene demand is expected to remain flat in 2026 on steady, though sluggish, downstream demand for phenol and acetone, which have big shares in the construction, automobile, appliances and resin industries. A source said sellers are taking customers' spending and borrowing power into deeper consideration when exploring spot and new contract opportunities to mitigate selling risk. Phenol is anticipated to see little fundamental change in 2026, sources said. There are few expected phenol turnarounds for maintenance in the first half of the year, and sources expect consumption to remain comparable to 2025. New housing permits declined in 2025 compared to 2024, according to US Census Bureau data, which led to fewer homes being built and less phenol demand. About half of all phenol produced in the US goes into the construction sector. Phenol and cyclohexane demand from the automotive industry may decline in 2026 on lower automobile manufacturing leading into the new year. Domestic automobile production trailed lower throughout 2025 as many producers were operating below full output rates. In August, US automobile production dipped below 100,000 units for the first time since January, according to the US Bureau of Economic Analysis (BEA). Before January, monthly domestic automobile production last dipped below 100,000 units in September 2021. The automotive industry makes up nearly 22pc of phenol consumption. Benzene supply is expected to remain low in 2026 on reduced US production and fewer imports because of US tariff policies that add costs for traders. On production, some market participants expect selective toluene disproportionation (STDP) unit operating rates to remain low in 2026 because BZ prices rose in late 2025 on tight supply, not strong demand, sources said. Though STDP margins look healthy on paper moving into 2026, if STDP operators raise production rates, the higher BZ supply would depress prices and margins to the point where STDP operators decide to turn run rates down again or idle their units, another source said. The US is historically in a net BZ deficit and usually relies on BZ imports to add supply when BZ production lags demand. With US tariff policies adding costs to those imports, shipments of BZ from Europe and Asia have largely declined. Market participants said they expect this trend to continue in 2026 without changes to US tariff policy. By Jake Caldwell Ethylbenzene economics vs Benzene and Reformate $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
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